Turning 60 Checklist: 10 Key Retirement Questions to Ask

Retirement is often on the forefront of people’s minds as they are looking at their finances and an exciting aspiration for many of us. In particular though, as someone gets five to eight years from retirement, the “margin for error” on planning mistakes becomes less and less and the questions to ask get more and more critical.

I have found that turning 60 often can act as an important milestone and catalyst for clients to really take a hard look at different aspects that may impact them. For all the information on the web I was surprised to find no succinct checklist of questions to give my clients. As they say, necessity is the mother of invention, so we developed these 10 questions to ask as you yourself — and your financial adviser — as you near retirement.

1. Do I have enough saved for retirement? If not, with likely five to eight years left, what course corrections must be made today?
2. At age 59½ many people’s 401(k)s and other retirement plans through employers allow you to do an “in-service” rollover into an IRA, even while still working. Is this a good idea for me? What are the pros and cons?*
3. Is my money in the right places? Is it diversified properly? Am I taking on more risk than I need to (or should)?
4. What percentage of my retirement income vs expenses will be guaranteed income (pensions, Social Security, income annuities, etc.) vs drawing down assets from accounts that can fluctuate?
5. What might long-term care cost me down the road, and how could I handle a potentially $10,000+ per month extra bill for a couple of years, for example, if need be?
6. Is my estate planning up to date? Is it correct?
7. Should I convert some of my pretax money (traditional or rollover IRA, for example) to a Roth IRA to give myself tax-free funds down the road to draw from, aka “tax diversification”?** What are the pros and cons of this strategy?***
8. Should I have life insurance that will continue beyond retirement? Is my retirement plan ready for the impact of me or my spouse passing away and what the reduction in Social Security would mean for the surviving spouse?
9. Do I have a written retirement plan?
10. When should I collect Social Security?

These are just some of the issues to consider when turning 60, or whatever age you find yourself seriously starting to consider retiring in the next five to eight years (or less). As much emphasis is placed on saving and investing, there often are other important areas missed in planning as mentioned, such as estate planning, life insurance and long-term care, to name a few.

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It’s been said going down a mountain is twice as perilous as going up it, and we find the same to be true for retirement planning. For the bulk of someone’s working career it’s fairly straightforward as people are in saving mode without too much concern about the swings of the market.

As the finish line approaches — or starting line, however you look at it — we are now tasked with converting assets into income and making sure there is enough income to last (while keeping up with inflation) over a potentially 30+ year period, all in the context of the other pitfalls that could pop up if not addressed. Hopefully, however, with careful planning, one can go into retirement checking off their “peace of mind box®” knowing that these issues have been addressed and enjoy the retirement they have always dreamed of.

* When considering rolling over the proceeds of your retirement plan to another tax-qualified option, such as an IRA, please note that you may have the option of leaving the funds in your existing plan or transferring them into a new employer’s plan. You may wish to consult with your new employer, if any, to learn more about the options available to you under your plan and any applicable fees and expenses. You may owe taxes if you withdraw funds from the plan. Please consult a tax adviser before withdrawing funds.

** Neither New York Life Insurance Company, nor its agents or affiliates, provides tax, legal or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.

*** Contributions to a Roth IRA may generally be withdrawn at any time without tax consequences. Earnings may generally be withdrawn tax-free if the account is held at least five years and withdrawals are made after the account owner reaches age 59½. If earnings withdrawals are made before the five-year period or age 59½, income taxes are due, and a 10% federal tax penalty may apply. When considering rolling over the proceeds of your retirement plan to another tax-qualified option, such as an IRA, please note that you may have the option of leaving the funds in your existing plan or transferring them into a new employer’s plan. You may wish to consult with your new employer, if any, to learn more about the options available to you under your plan and any applicable fees and expenses. You may owe taxes if you withdraw funds from the plan. Please consult a tax adviser before withdrawing funds.

This material is written by Caleb Harty, principal of Harty Financial, for informational purposes only. This is not a solicitation of any product or service. Any assumptions are hypothetical and for illustrative purposes only. Harty Financial nor its staff provide tax, legal or accounting advice. Please consult your own professional for those needs.

Caleb Harty is an Investment Adviser Representative of Eagle Strategies LLC, a Registered Investment Adviser and a Registered Representative offering securities through NYLIFE Securities LLC (member FINRA/SIPC), a Licensed Insurance Agency, 189 North Main Street, Unit 2A, Middleton, MA 01949. Phone: 978-972-5961 Eagle Strategies LLC and NYLIFE Securities LLC are New York Life Companies. Harty Financial is not owned or operated by NYLIFE Securities LLC or its affiliates.

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